Retail Observer

RETAILOBSERVER.COM FEBRUARY 2014 56 T here is excitement again in the CE business! UltraHD, OLED, and LifeStyle audio are game changers that will come into their own in 2014. This industry revitalization presents a great oppor- tunity to those who choose to take a leadership position in their market. Get your share! The typical TV business cycle runs for about six or seven years. New technology introductions spark interest. Sales initially grow slowly but profitably. Price points then evolve to mainstream levels and the business enjoys strong sales for several years. Eventually the business stagnates from lack of new technology and becomes replacement driven. Sales and margin fall. And the cycle begins again. For the last few years we have been fighting the effects of a soft economy and the tail of the current TV cycle. An improved economy and the introduction of UltraHD TV usher in this new business cycle. There is a lot to gain for those of you committed to succeed in the Consumer Electronics business. To win this means investment in strong assortments, product feature and benefit training, and robust advertising. It means marketing your store as the destination to see, understand, and buy UltraHD and OLED. Along with LifeStyle Audio these are compelling products that change the game of home entertainment. Customers are now becoming interested to learn, and ultimately buy. Retailers who engage with consumers early will reap the rewards both now and in the future. We believe the industry projections for UltraHD sales in 2014 are understated. This is because vendors will likely drive the costs to broadly affordable price points more quickly than anticipated. In recent years most CE product's pricing evolution and consumer adoption have occurred much more quickly than they did in the past. Stake your claim to this opportunity now and enjoy the benefits of the most lucrative parts of the new TV business cycle. In addition to the new TV technologies, the business benefits from several current trends that are delivering higher ticket sales and/or better profitability. • ASP and Margin Stabilization – Both areas reflect positive changes from multiyear negative trends. • Screen Size Shift – There have always been screen size sweet spots. Today, it is the 50" to 70" sizes. Customers recognize the extraordinary value and are buying. • Accessory Opportunities – the big screen customer is more likely than others to invest in related products and accessories at the time of sale. LIFESTYLE AUDIO LifeStyle audio is a range of products that make the sound experience more convenient than traditional sound systems. These easy to enjoy systems are often controlled by your Smartphone. Beyond the incremental sales growth from this category, you will benefit from compelling profit margins for your CE business as well. Below are some examples. • Wireless 2.1 Systems—These easy to set up systems have a small amp that connects to two satellite speakers and a wireless sub. Connect your TV for great sound and also enjoy Bluetooth and/or AirPlay audio from your Smartphone. • Portable Bluetooth and/or AirPlay Wireless Speakers—Play your favorite music from your Bluetooth enabled Smartphone or Tablet. Airplay equipped wireless speakers work with Apple AirPlay for playing music from your iTunes ® library from iPhone or iPad. • Multi-room Wireless Systems —These systems can play music in multiple rooms of the home. They are fun to use and easy to set up. A wireless multi-room system differs from a collection of stand-alone wireless speakers because you can control all the speakers in the system from a single remote, usually a Smartphone or Tablet app. You can play the same music throughout the house or choose different music for different rooms. LifeStyle audio is hot, so make sure to add to or expand your assortments of these products. Leverage the opportunity in 2014! Increase your benefit from the encouraging trends in the TV business: • Be the destination for UltraHD in your market. Assort, train, advertise. • Ramp up your assortment in the profitable LifeStyle Audio category. • Assort, display, and sell, the full basket of related products and accessories. RO Doug Schatz Consumer Electronics Trends CONSUMER ELECTRONICS 2014 It's a Whole New Ball Game—Get Your Share! Doug Schatz is the VP of Electronics Merchandising for Nationwide Marketing Group, with over thirty years of executive level experience in retail merchandising, business development, marketing, and sales.

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